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SAI INTERNATIONAL SCHOOL

CLASSS XI
SUBJECT: BUSINESS STUDIES

CHAPTER -9,

Internal trade

Topics: Retail Trade, Services to Manufacturers and Wholesalers, Consumers

(LESSON NOTES-42)
RETAIL TRADE

A retailer is a business enterprise that is engaged in the sale of goods and services directly to the

ultimate consumers. The retailer normally buys goods in large quantities from the wholesalers
and sells them in small quantities to the ultimate consumers. The retails represent the final stage

in the distribution where goods are transferred from the hands of the manufacturers or
wholesalers to the final consumers or users.

Retailing is, thus, that branch of business which is devoted to the sale of goods and services to

the ultimate consumers for their personal and non-business use. There may be different ways of
selling the goods viz., personally, on telephone, or through vending machines.

Also, the products may be sold at different places, viz., in a store, at the customer’s house or any
other place. Some of the common situations that we encounter in our daily life, for example, are

the sale of ball pens or some magic medicine or book of jokes in the roadways buses; the sale of

cosmetics/detergent powder, on door-to door sales basis; and the sale of vegetables by the road
side by a small farmer. But as long as the goods are sold to ultimate consumers, these will be

treated as cases of retail selling. Thus, irrespective of ‘how’ the products are sold or ‘where’ the
sale is made, if the sales are made directly to the consumers, it will be considered as retailing. A

retailer performs different functions in the distribution of goods and services.
He/she purchases a variety of products from the wholesale distributors and others, arranges for

proper storage of goods, sells the goods in small quantities, bears business risks, grades the

products, collects market information, extends credit to the buyers and promotes the sale of
products through displays, participation in various schemes, etc.